EMPLOYERS are making it easier for
employees to take more control of their
finances by continuing to simplify
retirement plan design and expanding
the savings solutions they offer to
include Roth 401(k)s and health
savings accounts (HSAs), according
to the latest Bank of America Merrill
Lynch Plan Wellness Scorecard.

“Backed by the financial wellness
solutions of Bank of America Merrill
Lynch, employers are able to give
employees access to the financial help
they want and establish a culture of
financial wellness. This engagement
growth has also been driven in part
by employers making education more
accessible with on-site meetings,
webcasts and personal consultations,”
the company says.

Among Bank of America Merrill
Lynch’s proprietary 401(k) business,
the last year has seen a 6% increase in
new enrollments, a 17% increase in plan
assets, a 20% increase in contributions
and an 18% increase in deferral rate

401(k) Strides in 2016

WORKERS throughout the U.S. are
struggling with managing their
finances, and that stress could spill
over, onto their company’s bottom line.

According to a recent survey by
Mercer, employers could lose up to
$250 billion in wages for employees’
time spent distracted by money
issues. The firm finds that employees
on average spend about 150 work
hours worrying about finances each
year. On average, they spend about 13
hours per month doing so, with 16%
reporting they spend over 20 hours.

These situations could have dramaticeffects on employee engagement,In response, more and moreemployers are turning to financialwellness programs. But while it is ahot topic in the employee benefitsworld, financial wellness is often diffi-cult to define. Mercer notes that finan-cial wellness is not just about having agood grip on financial literacy and thatprograms focusing on this conceptalone may fail to deliver. Instead, thefirm suggests that programs needto improve what it calls “financialcourage,” or the confidence to engagefinancial issues.

Mercer says certain tools can help
employees approach these challenges
in a simple way—i.e., one requiring
just a basic level of financial literacy.
The firm points to options such as
budgeting tools and coaching, credit
management assistance, student loan
refinancing programs and access to
non-retirement savings vehicles.

In addition, it also developed the
Mercer Financial Wellness Index. To
measure an employee’s financial wellness, the index focuses on criteria
including level of comfort in meeting
various financial obligations and level
of financial stress. —Javier Simon

Increase
in enrollment

6%

Increase
in contributions

20%

Increase
in plan assets

17%

Increase
in deferral
rate changes
18%

changes. The majority of employees
in every age group actively contribute
to their 401(k) accounts, with younger
employees slightly more likely to do
so—82% of Millennials made a contribution, as did 77% of Generation X and

75% of the Baby Boomers.

Nearly two-thirds of employeessay their employer has been at leastsomewhat influential in getting themto save for retirement. Employers thatare looking to help their employeessave more and establish a cultureof wellness in the workplace areembracing simplified plan features.Automatic increase has become verypopular, showing a 24% year-over-year adoption growth rate and a 172%increase since 2012.The Scorecard finds that the higherthe automatic enrollment default rate,the higher the levels of employees’participation in their 401(k) plan.—Rebecca Moore